Taxman probes MPs’ expenses claims

The tax affairs of 27 MPs are being investigated following inspections of their taxpayer-funded expenses payouts, it has emerged.

It follows a warning from the head of HM Revenue and Customs Dave Hartnett in July that politicians would be placed under increased scrutiny in the wake of the exposure of their claims.

The tax affairs of 27 MPs are being probed as a result of the expenses row

The Daily Telegraph said any found to have claimed for non-essential items could be billed for 40% of the value plus interest and potentially face fines.

Controversy has also surrounded the failure of MPs to pay capital gains tax on the sale of properties bought using their Commons second homes allowance. And many more, including a string of ministers, have been criticised for apparently failing to pay tax on their professionally-completed returns to the revenue.

“Inquiries are an integral part of HMRC’s work, ensuring everyone pays the right tax,” a spokeswoman said. “An inquiry does not necessarily mean that there is a problem. Most inquiries are closed quickly.”

Giving evidence to the Committee on Standards in Public Life’s inquiry into MPs’ expenses this summer, Mr Hartnett signalled that the standard random checks of Parliamentarians would be stepped up. “We have written to all MPs, inviting them to talk to us if they want to talk to us and we have picked up there will be a number that we need to talk to as well,” he told the committee.

Asked whether MPs had paid tax on the cost of having their returns completed by accountants, he said: “Some have got their tax affairs correct and some haven’t. They should all be paying tax on that.”

Meanwhile, Commons Speaker John Bercow has urged MPs to pay back whatever sums are demanded from them by the audit of expenses being carried out by Sir Thomas Legg. He said that in order to show the public that they had “got the message” over expenses, MPs had to take the consequences of “demonstrably wrong or extravagant” claims they made in the past.

Meanwhile, Scotland Yard would not comment on a report that at least one politician could face prosecution early next year over expenses claims. The Daily Mail said detectives believed they had sufficient evidence against Labour former minister Elliot Morley to send a file to the Crown Prosecution Service.

Police announced in June that they were launching full inquiries into several MPs and peers, understood to include Mr Morley and Labour MP David Chaytor, both of whom claimed for non-existent mortgages. Also thought to be under investigation is Baroness Uddin, who has been accused of claiming an empty Maidstone flat was her main residence so that she could claim an allowance for peers who live outside the capital.